Loblaw facing ‘over 1,000 supplier requests’ for fresh price hikes: Galen G. Weston
BRAMPTON, Ont. –
Canada’s largest grocer is going through contemporary value hikes from suppliers, signalling meals inflation will proceed its relentless ascent within the coming months.
“We still have over 1,000 supplier requests on our desks for significant cost increases,” Galen G. Weston, chairman and president of Loblaw Companies Ltd., mentioned throughout a name with analysts on Thursday.
“We continue to believe that these inflationary pressures are temporary and that they will ease with time, but predicting how long that will take is proving extremely challenging,” he mentioned. “We will continue to push back on unjustified cost increases from suppliers.”
His feedback got here because the dad or mum firm of grocery chains like Loblaws and No Frills and drugstores like Shoppers Drug Mart mentioned its fourth-quarter revenue amounted to $529 million or $1.62 per diluted share.
That’s down from $744 million or $2.20 per diluted share a yr earlier.
The result’s “evidence that retail prices are not growing faster than costs and the company is not taking advantage of inflation to drive profit,” Loblaw chief monetary officer Richard Dufresne mentioned in the course of the name.
The grocery store big has come below intense scrutiny amid rising meals costs, with critics suggesting the corporate is profiteering off inflation to pad earnings.
Yet the grocery store’s gross margins additionally dipped barely within the quarter ended Dec. 31, with an adjusted gross revenue of 30.6 per cent down from 30.9 per cent in the identical quarter a yr earlier.
The firm mentioned a lower in its meals retail margin — largely associated to its No Name value freeze and elevated promotional exercise –was partially offset by progress in greater margin drug retail gross sales.
But whereas Loblaw’s revenue edged down its income rose almost 10 per cent in contrast with a yr in the past.
Revenue totalled $14.0 billion, up from $12.8 billion within the fourth quarter of 2021.
The enhance in income got here as meals retail same-store gross sales gained 8.4 per cent, with low cost grocery shops persevering with to outperform standard chains, whereas drug retail same-store gross sales rose 8.7 per cent on robust demand for cough and chilly merchandise and wonder and cosmetics.
“Our strong sales and market share performance this quarter are a clear indication that our efforts resonate with customers,” Dufresne mentioned.
On an adjusted foundation, Loblaw mentioned it earned $1.76 per diluted share in its newest quarter, in contrast with an adjusted revenue of $1.52 per diluted share a yr earlier.
Analysts on common had anticipated a revenue of $1.71 per share and $13.7 billion in income, in accordance with monetary markets knowledge agency Refinitiv.
In its outlook for 2023, the corporate mentioned it expects its retail business to develop earnings sooner than gross sales, with adjusted web earnings per widespread share progress within the low double digits.
Loblaw mentioned it expects web capital expenditures of $1.6 billion for the yr together with gross capital investments of about $2.1 billion offset by $500 million in proceeds from actual property gross sales.
This report by The Canadian Press was first revealed Feb. 23, 2023.
